An Ex-Parte Decree Obtained By Suppressing Fact Of Non-Service Of Summons On Defendant Would Be Vitiated By Fraud: Calcutta HC

The Bench of Justice Shekhar B. Saraf set aside an ex-parte decree under Order IX Rule 13 CPC on the ground that the defendant could not be served with a notice of original plaint, the amended plaint, and the writ of summons of the amended plaint as it was not present in the address mentioned in the plaint and the service.

The Court further held that a suit cannot be transferred to the category of 'Undefended Suit' when the defendant was never served with the notice of the suit.

Facts

The parties entered into an agreement dated 28.08.2013 whereby both parties were to jointly develop properties situated at Raipur. Thereafter, it was agreed between the parties that the respondent/plaintiff would lend of sum of Rs. 1.5 Cr to the petitioner/defendant to carry out the project work.

A dispute arose between the parties when allegedly the petitioner failed to return the loan amount. Accordingly, the respondent filed the suit for recovery of money. The petitioner could not present its case due to the fact that it was never served with the notice of the suit as all the summons were returned with remarks of non-presence of the petitioner at the given address. However, the respondent, without disclosing the fact of non-service on the petitioner, got the suit transferred to the category of 'Undefended Suit' on the ground of non-appearance of the petitioner.

The Court passed an ex-parte decree in favour of the respondent. Aggrieved by the decision of the court, the petitioner filed an application under Order IX Rule 13 of CPC for setting aside the impugned decree.

The Contention of the Parties

The petitioner challenged the ex-parte decree on the following grounds:

• The petitioner was never aware of the filing of the suit as no notice was ever served on it.
• The petitioner got to know about the present suit only when the respondent replied to its notice under Section 11 of the A&C Act.
• The then advocate of the petitioner neglected or failed to take proper steps to follow up the proceedings.
• The address as provided in the suit is the former address of the petitioner and the respondent was made aware of such change in address by way of notice under Section 11 of the A&C Act.
• The respondent got an order for substituted service under Order 5 Rule 20 of the CPC through publication of notice in the Central Chronicle newspaper and the whole suit has been tried, heard and disposed of on the basis of such substitute service. However, the petitioner did not come across any such advertisement.
• The respondent has committed a fraud on the Court by not appraising it of the fact of the change in petitioner's address, the knowledge of which it already had.

The respondent countered the submission of the petitioner on the following grounds:

• Blaming an advocate is not a ground for non-appearance.
• The writ of summons was served upon the petitioner prior to amendment of the plaint and subsequent to the amendment of the plaint. As per Sheriff's report, on both occasions when the petitioner was served by speed post, it refused service and it amounts to a valid service.
• The substituted service under Order V Rule 20 of the CPC was done by newspaper publication as per the order of the Court.
• Once the suit is transferred to the warning list of undefended suits, the defendant cannot enter appearance without the special leave of the court, therefore, the petitioner ought to have obtained the special leave.

Analysis by the Court

At the outset, the Court reiterated that an ex-parte decree can be set aside under Order IX Rule 13 CPC only in two situations, either when the defendant satisfies the court that the summons was not served upon him or he was prevented by any sufficient cause from appearing before the Court at the time of the hearing.

The Court observed that all the services upon the petitioner were returned due to the non-presence of the petitioner at the given address. However, the respondent applied for the transfer of the suit to the 'undefended category' without disclosing the fact that the service of summons was still pending.

The Court held that the respondent got the suit transferred to the undefended category only by supressing the material fact of incomplete service of summons, therefore, it has committed a fraud and abused the process of Court.

The Court held that an ex-parte decree which is obtained by suppression of the fact of non-service on the defendant would be vitiated by fraud, therefore, liable to be set aside under Order IX Rule 13 of CPC as the petitioner was prevented from presenting its case before the court.

The Court held that the doors of justice would be closed for a litigant whose case is based on false hood or suppression of material facts. Anyone who approaches the Court must give full and fair disclosure of all the materials.

Accordingly, the Court set aside the ex-parte decree and directed the petitioner to file its written statement.

Case Title: Aaryan Projects Pvt. Ltd. v. Klowin Infrastructure Pvt. Ltd. G.A. No. 3 of 2021 in C.S. No. 205 of 2017

Case Citation: 2022 LiveLaw (Cal) 300

Date: 30.08.2022

Counsel for the Petitioner: Mr. Rupak Ghosh, Advocate, Mr. Nikunj Berlia, Advocate Mr. Varun Kothari, Advocate

Counsel for the Respondent: Mr. Abhrajit Mitra, Sr. Advocate, Mr. Jishnu Chowdhury, Advocate, Mr. Sankarsan Sarkar, Advocate, Mr. Mehboob Rahman, Advocate, Ms. Tahmina Aslam, Advocate.

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